RICHARD DYSON: The complaints industry is booming thanks to the banks

Angry: The only truly welcome outcome of the move would be less reason to complain

How did we get to the stage where a body that deals with complaints had to be set up to deal with complaints about hundreds of businesses that exist solely to handle complaints?

This point was reached last week. The Ministry of Justice announced that the Legal Ombudsman – an organisation originally set up to deal with complaints about lawyers –will from next year also deal with complaints about so-called ‘complaint management companies’. There are almost 1,000 such firms regulated by the Ministry of Justice, and an unknown number of unregulated ones.

Some are well run, others decidedly not. Their combined turnover is £1 billion.

Much of these firms’ money is made by supposedly helping consumers complain to banks for mis-selling insurance.

But as Financial Mail has frequently reported, some are worse than useless – pursuing spurious complaints where none exist or messing up legitimate ones.

The Ministry of Justice says it received 14,000 complaints about these firms last year, and that number will grow. Hence the Legal Ombudsman’s new, expanded role, for which it will have to employ yet more complaints-handlers, adding further to this burgeoning – but somehow so depressing – growth industry.

Don’t forget the original Financial Ombudsman Service, the world’s biggest consumer complaints handling organisation. It currently operates at record capacity, with 2,000 staff taking on 1,000 new complaints per day and itself needs to grow. Banks, too, are recruiting in their complaints divisions, with reports last week that several are offering as much as £900 a day to the highly-skilled staff required to calculate certain compensation deals.

How did we get here? Banks must bear much of the blame for their original crimes, but so must the claims industry, particularly the cynical segment that exploits consumers’ anger. It achieves nothing except to add to the total cost of the clear-up.

The Ministry of Justice is right to offer consumers some avenue of redress against the claims industry.

And it should do more to monitor and police these businesses. But the only truly welcome outcome would be less reason to complain, fewer complaints and fewer complainants.

Natalie Ceeney, who runs the Financial Ombudsman Service, once said she would love nothing more than for her organisation to have no need to exist.

It’s a wonderful aspiration and unusual – if not unique –in being one that banks’ customers and bosses could share.